If North Carolina wants to take advantage of the skyrocketing revenue generated by online sports betting while curtailing the illegal market, the state needs to iron out regulations for online sports betting sooner rather than later.
That is the overarching message to states without legal sports betting from anti-fraud and geolocation technology company, GeoComply Solutions, and the American Gaming Association.
No signs of a sports betting slowdown in the near future
GeoComply, whose clients include the biggest names in online gaming, reported a 56% increase in geolocation sports betting transactions during the first week of the 2023 NFL season compared to 2022’s opening week. Additionally, there was a 40% increase in betting accounts for GeoComply’s U.S. customers.
According to the American Gaming Association, revenue from sports betting “soared 61.1 percent year-over-year, from $4.34 billion in 2021 to $7.50 billion in 2022, as Americans bet a total of $93.2 billion on sports throughout the year.”
Even after the first touchdown of the 2023 NFL season, consumers continued to make in-game bets. GeoComply saw a “massive spike” in betting traffic of 4,200 transactions per second immediately following the Detroit Lions’ first touchdown.
It was the highest rate of volume in the first week of NFL games ever for GeoComply. The company revealed that betting in states that recently launched online sports betting drove that growth.
NCSharp projects that North Carolina could take in $6-$7 billion in total bets in its first year of online sports betting.
Consumers are hungry for legal options
GeoComply Co-Founder and CEO Anna Sainsbury urges states to legalize online sports betting as soon as possible, so they can benefit financially and protect consumers from illegal sportsbooks.
“While the increase in our transaction volume emphasizes the appetite for regulated online sports betting,” said Sainsbury, “our data also accentuates an urgent call to action. States without regulated online sports betting should get off the legalization sidelines and unlock their ability to protect consumers and generate significant tax revenue.”
GeoComply’s technology prevents consumers from accessing legal online sportsbooks in states where mobile sports betting is illegal. Much of the blocked traffic came from states adjacent to those that have legalized online sports betting.
South Carolinians will bet in North Carolina when the market legalizes
GeoComply tracked the geolocation check-ins in unregulated markets, including South Carolina.
There are strong demands for legal #sportsbetting in unregulated states. 1 week into #NFL Kickoff, there were 1m #geolocation checks from 53k active accounts across 6 unregulated states. An estimate of $320.5m in taxes was lost! Read more below.https://t.co/2159l56XRt pic.twitter.com/tsrFPzT5Zc
— GeoComply (@GeoComply) September 18, 2023
The findings highlight two key points. First of all, choosing not to legalize sports betting does not stop people from trying to place bets at legal sportsbooks and, more significantly, those people still succeed at placing bets at illegal offshore sportsbooks.
Second, it indicates to states like North Carolina that South Carolinians near the NC border will cross it to place legal sports bets once the market launches. Since South Carolina has shown no taste for passing legal sports betting, this revenue stream will also go untapped for as long as North Carolina pushes back the launch of online sports betting.
Where does the North Carolina online sports betting launch stand?
With a flexible deadline that spans from Jan. 8, 2024, to June 14, 2024, to launch North Carolina online sports betting, the North Carolina Lottery Commission (NCLC), could see opportunities such as next February’s Super Bowl and March Madness slip by along with the possibility of millions in tax revenue if they don’t act with measured haste.
The agency is still putting together a staff to oversee the process of issuing licenses and writing a licensing framework for online and retail sports betting. The NCLC tapped Sterl Carpenter to be the deputy executive director of gaming compliance and sports betting. Carpenter arrived from the Massachusetts Gaming Commission (MGC) where he helped usher in a successful sports betting launch in the New England state.
Massachusetts launched retail sports betting within five months after a law was passed, in time for the Super Bowl, and rolled out online sports betting 38 days later. The MGC hit the ground running with multiple hours-long public meetings each week in the months leading up to launch.
So far, there doesn’t seem to be that type of urgency in North Carolina. In addition to Carpenter, the NCLC also hired two attorneys on its legal staff and posted a job listing for a licensing director of sports betting. The commission has secured the services of Gaming Laboratories International, a well-known gaming lab and certification company to test, audit, and certify gaming machines.
The NCLC has yet to host its first sports-betting focused regulatory meeting.
Image Credit: Danny Karnik / AP images